Myrlie v. Countrywide Bank
2011 U.S. Dist. LEXIS 17976
D. Minnesota2011Background
- Plaintiff Collin Myrlie purchased a Dakota County property in 2005 with a construction loan from Cherokee State Bank, later assigned to Countrywide entities.
- Defendants allegedly agreed to a loan workout/modification in August 2008, but Plaintiff never received modification documents.
- Foreclosure proceedings began in 2008 after default; sheriff's sale occurred on November 25, 2008.
- Plaintiff contends he relied on alleged promises of modification, seeking promissory estoppel and negligence damages.
- Redemption period followed foreclosure; Plaintiff did not redeem and asserted lost profits, increased costs, and lost remedies.
- Court granted summary judgment for Defendants, dismissing claims with prejudice under standards for promissory estoppel, Minnesota Credit Agreement Act, negligence, and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Promissory estoppel elements at issue | Myrlie relied on a clear promise to modify | No clear promise; no genuine issue | Summary judgment for defendants; no promissory estoppel |
| Effect of a written contract on promissory estoppel | Modification promise creates estoppel despite existing mortgage | Written contract precludes estoppel | Written contract/credit agreement bars promissory estoppel under Minn. Stat. § 513.33 |
| Minnesota Credit Agreement Act applicability | Loan modification constitutes new credit agreement | Modification not evidenced in writing | Act bars claim absent a written modification agreement |
| Negligence claim viability | Defendants breached duty by failing to modify | No duty beyond debtor-creditor relationship; no tort duty | Negligence claim fails as a matter of law |
| Punitive damages viability | Punitive damages requested | Pleading improper under statute | Punitive damages dismissed; statute bars |
Key Cases Cited
- Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369 (Minn.1995) (promissory estoppel elements require clear promise and reliance)
- Greuling v. Wells Fargo Home Mortgage, Inc., 690 N.W.2d 757 (Minn.App.2005) (writing required for credit agreements under Minn. Stat. § 513.33)
- Banbury v. Omnitrition Intern., Inc., 533 N.W.2d 876 (Minn.App.1995) (promissory estoppel contrasted with at-will terms; modification context differs)
- Rural American Bank of Greenwald v. Herickhoff, 485 N.W.2d 702 (Minn.1992) (statutory purpose of § 513.33 to address oral promises)
- Lampert Lumber Co. v. Joyce, 405 N.W.2d 423 (Minn.1987) (negligent breach of contract not a tort action)
- Olson v. Synergistic Techs. Bus. Sys., Inc., 628 N.W.2d 142 (Minn.2001) (elements of promissory estoppel; reliance criteria)
- Funchess v. Cecil Newman Corp., 632 N.W.2d 666 (Minn.2001) (duty in negligence cases determined as a matter of law)